The global edge computing market was valued at USD 16.45 billion in 2023 and is projected to experience substantial growth, expanding at a compound annual growth rate (CAGR) of 36.9% from 2024 to 2030. Edge computing represents a technological evolution that adds a layer of complexity for organizations by enabling a diverse range of stakeholders to manage various aspects of IT infrastructure, networking, software development, traffic distribution, and service management. This technology seamlessly integrates hardware, software solutions, and networking architectures to meet the needs of a broad spectrum of use cases across multiple industries. Although edge computing is still considered to be in its early stages of development, its operational models and deployment strategies are expected to evolve significantly. This presents promising growth opportunities for new market entrants and innovators looking to capitalize on the expanding edge computing ecosystem.
The COVID-19 pandemic has had a profound impact on the adoption of data centers and edge computing technologies. As the pandemic drove increased reliance on digital services, businesses were prompted to accelerate their deployment of these technologies. However, with the growing adoption of edge computing, investment levels are expected to see a slowdown in the near future, as many organizations across different sectors are scaling back or cutting costs to achieve substantial savings. Despite this trend, certain industries, notably telecommunications and healthcare, are continuing to increase their spending on edge computing and Internet of Things (IoT) technologies. These sectors recognize the need for robust, low-latency solutions to handle the vast amounts of data being generated by connected devices.
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In response to these market shifts, businesses are seizing the opportunity to introduce new services and products. For example, the telecommunications industry is making rapid strides in the development of video conferencing solutions, such as Microsoft Teams and Zoom, which have become crucial during the pandemic era. In addition, telecom companies are working to innovate new offerings that can meet the rising demand for improved connectivity and communication solutions, as businesses and consumers continue to rely on digital interactions.
Component Segmentation Insights
Looking at the components of the edge computing market, the hardware segment accounted for a dominant share of more than 43% of the total market revenue in 2023. The demand for hardware is experiencing a significant rise in the managed services industry and is expected to maintain a substantial market share throughout the forecast period. As the number of IoT and Industrial Internet of Things (IIoT) devices grows rapidly, the volume of data generated by these devices is also increasing. To efficiently manage this growing data influx, businesses are increasingly adopting edge computing hardware to alleviate the strain on centralized cloud services and data centers. This shift is driving demand for edge computing infrastructure to support the processing of data closer to its source, reducing latency and improving real-time data processing capabilities.
The hardware segment itself is further subdivided into several key categories, including Edge Nodes/Gateways (Servers), Sensors/Routers, and other devices. Among these, the Edge Nodes/Gateways (Servers) segment captured a significant portion of the market share in 2023. This is largely driven by the rising demand for data processing power at the edge of the network. Additionally, the growing number of data centers across various industries is contributing to the increased demand for edge routers, which connect local networks with wider area networks (WAN). As the volume of incoming traffic grows, edge routers must be equipped with greater flexibility and power to handle the demands of low-latency, high-throughput data processing. The need for secure and efficient data management at the edge of the network is expected to continue driving growth in the hardware segment throughout the forecast period, as businesses seek to optimize their edge computing infrastructure and meet the demands of an increasingly connected world.
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